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GUARANTEE AND POSTPONEMENT OF CLAIM

Guarantee Agreement

GUARANTEE AND POSTPONEMENT OF CLAIM | Document Parties: Thomas Equipment, Inc. | ROYAL BANK OF CANADA  | PNEUTECH INC | ROUSSEAU CONTROLS INC. You are currently viewing:
This Guarantee Agreement involves

Thomas Equipment, Inc. | ROYAL BANK OF CANADA | PNEUTECH INC | ROUSSEAU CONTROLS INC.

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Title: GUARANTEE AND POSTPONEMENT OF CLAIM
Date: 7/29/2005

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                                                                    EXHIBIT 10.3

 

                       GUARANTEE AND POSTPONEMENT OF CLAIM

 

 

TO: ROYAL BANK OF CANADA

 

      FOR VALUABLE CONSIDERATION, receipt whereof is hereby acknowledged, the

undersigned and each of them (if more than one) hereby jointly and severally

guarantee(s) payment on demand to ROYAL BANK OF CANADA (hereinafter called the

"Bank") of all debts and liabilities, present or future, direct or indirect,

absolute or contingent, matured or not, at any time owing by PNEUTECH INC.,

ROUSSEAU CONTROLS INC. AND/OR HYDRAMEN FLUID POER LIMITED. (hereinafter called

the "customer") to the Bank or remaining unpaid by the customer to the Bank,

heretofore or hereafter incurred or arising and whether incurred by or arising

from agreement or dealings between the Bank and the customer or by or from any

agreement or dealings with any third party by which the Bank may be or become in

any manner whatsoever a creditor of the customer or however otherwise incurred

or arising anywhere within or outside the country where this guarantee is

executed and whether the customer be bound alone or with another or others and

whether as principal or surety (such debts and liabilities being hereinafter

called the "liabilities"); the liability of the undersigned hereunder being

limited to the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000.00),

together with interest thereon from the date of demand for payment at a rate

equal to THE BANK'S PRIME INTEREST RATE PER ANNUM IN EFFECT FROM TIME TO TIME

PLUS FIVE (5%) percent per annum, as well after as before default and judgment.

 

AND THE UNDERSIGNED AND EACH OF THEM (IF MORE THAN ONE) HEREBY JOINTLY AND

SEVERALLY AGREE(S) WITH THE BANK AS FOLLOWS:

 

(1) The Bank may grant time, renewals, extensions, indulgences, releases and

discharges to, take securities (which word as used herein includes securities

taken by the Bank from the Customer and others, monies which the Customer has on

deposit with the Bank, other assets of the Customer held by the Bank in

safekeeping or otherwise, and other guarantees) from and give the same and any

or all existing securities up to, abstain from taking securities from, or

perfecting securities of, cease or refrain from giving credit or making loans or

advances to, or change any term or condition applicable to the liabilities,

including without limitation, the rate of interest or maturity date, if any, or

introduce new terms and conditions with regard to the liabilities, or accept

compositions from and otherwise deal with, the customer and others and with all

securities as the Bank may see fit, and may apply all moneys at any time

received from the customer or others or from securities upon such part of the

liabilities as the Bank deems best and change any such application in whole or

in part from time to time as the Bank may see fit, the whole without in any way

limiting or lessening the liability of the undersigned under this guarantee, and

no loss of or in respect of any securities received by the Bank from the

customer or others, whether occasioned by the fault of the Bank or otherwise,

shall in any way limit or lessen the liability of the undersigned under this

guarantee.

 

(2) This guarantee shall be a continuing guarantee and shall cover all the

liabilities, and it shall apply to and secure any ultimate balance due or

remaining unpaid to the Bank.

 

(3) The Bank shall not be bound to exhaust its recourse against the customer or

others or any securities it may at any time hold before being entitled to

payment from the undersigned of the liabilities. The undersigned renounce(s) to

all benefits of discussion and division.

 

(4) The undersigned or any of them may, by notice in writing delivered to the

Manager of the branch or agency of the Bank receiving this instrument, with

effect from and after the date that is 30 days following the date of receipt by

the Bank of such notice, determine their or his/her liability under this

guarantee in respect of liabilities thereafter incurred or arising but not in

respect of any liabilities theretofore incurred or arising even though not then

matured, provided, however, that notwithstanding receipt of any such notice the

Bank may fulfil any requirements of the customer based on agreements express or

implied made prior to the receipt of such notice and any resulting liabilities

shall be covered by this guarantee; and provided further that in the event of

the determination of this guarantee as to one or more of the undersigned it

shall remain a continuing guarantee as to the other or others of the

undersigned.

 

 

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(5) All indebtedness and liability, present and future, of the customer to the

undersigned or any of them are hereby assigned to the Bank and postponed to the

liabilities, and all moneys received by the undersigned or any of them in

respect thereof shall be received in trust for the Bank and forthwith upon

receipt shall be paid over to the Bank, the whole without in any way limiting or

lessening the liability of the undersigned under the foregoing guarantee; and

this assignment and postponement is independent of the said guarantee and shall

remain in full effect notwithstanding that the liability of the undersigned or

any of them under the said guarantee may be extinct. The term "Liabilities", as

previously defined, for purposes of the postponement feature provided by this

agreement,


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